The Role of Compe•tors and Customers
in the Development of Environmentally
Sound Technologies
Magdalena Marczewska
*Abstract
The ar•cle presents two important forces influencing the development of product innova•ons by suppliers of environmentally sound technologies, namely compe•tors and consumers. It discusses these phenomena on the basis of different theore•cal approaches (Ansoff and Stewart, 1967; Von Hippel, 1987, 2005, 2007; Prahalad and Ramaswamy, 2004). The results of the study show that Polish companies-suppliers of environmentally sound technologies are willing to gain inspira•on from both demand and supply side market players. In case of supply side of the market, in most cases inspira•on was not aimed at copying exis•ng successful ideas. The compe•tors are perceived rather as a source of inspira•on for further development of technological solu•ons. Although companies concentrate on having a rela•onship with custom-ers and track their behavior, these rela•ons have not been established by the Polish companies researched here in order to treat users as co-creators of product improve-ments or novel•es.
Keywords: environmentally sound technologies, customers, compe•tors, product in-nova•ons, user-driven innova•ons.
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In !mes of increasing compe!!on and con!nuously changing customer needs, efficient response to environmental changes has become an important success factor for enterprises (Homburg, Grozdanovic and Klarmann, 2007, p. 18). In order to survive and thrive on such a compe!!ve market, a company must seek to respond con!nuously to opportuni!es and threats posed by a dynamic environment (White, Varadarajan and Dacin, 2003, p. 63). Over the years, there has been a visible shi# in the role of the consumer, from unaware to informed, from isolated to connected, from passive to ac!ve (Prahalad and Ramaswamy, 2004, p. 2). Empirical research has revealed that in many fields, users are more likely to contribute to the inquiring marke!ng researcher than
* Magdalena Marczewska, M.A., Faculty of Management, University of Warsaw, 1/3 Szturmowa Street, 02-678 Warsaw, Poland, mmarczewska@wz.uw.edu.pl.
research gathering data concerning their unmet needs. Moreover, they can prompt insights and new ideas regarding solu•ons that might be•er respond to their needs (Urban and Von Hippel, 1988, p. 569). Environmental markets represent a wide range of rela•onships between companies that collaborate and compete on this market. This system of forces is crucial for the innova•ve process and new products development (Skea, 1995, pp. 402-405).
The main purpose of this study is to iden•fy and analyze two important factors influencing the development of product innova•ons by suppliers of environmentally sound technologies, namely compe•tors and consumers. The study examines an impact of compe•tors and consumers on the product por•olio of companies-suppliers of environmental technologies, including their decisions to develop new solu•ons, withdraw or improve originally created ones. Moreover, the importance of consumers and compe•tors as a source of inspira•on for innova•on will be iden•fied. The research ques•ons are the following:
To what extent has the imita•on of compe•tors’ ideas resulted in crea•ng and developing successful product innova•ons by the companies-suppliers of environmentally sound technologies in Poland?
How do companies gather informa•on about specific technologies offered by their compe•tors?
What is the role of customers in the development of environmentally sound technologies offered by the companies?
The paper seeks to show the influence of compe•tors and customers on companies’ decisions on developing environmentally friendly product innova•ons and analyze this phenomena from management of technology and innova•on management perspec•ves.
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The issues of sustainable development and the rela•onships between the environment and economy are increasingly arising as the topics of discussions amongst the society, policy makers, researchers and businesses. Recent innova•on studies concerned with the environmental issues are interested in capturing environmentally friendly changes in technology and the examining behavior of market players, such as companies, their compe•tors and customers. A previous genera•on of the research on environmental innova•on was primarily focused on the genera•ons of technologies and their diffusion (Weber and Hemmelskamp, 2005, pp. 58-59). However, this approach does not seem to be sufficient nowadays as it fails to adequately capture the relevant market forces. Therefore, this study goes in line with current research strands focusing on the role of two groups of market players,
such as compe•tors and consumers in innova•on ac•vity of the suppliers of environmentally sound technologies. Before going further with this analysis it is necessary to define environmentally sound technologies. These are “techniques and technologies capable of reducing environmental damage through processes and materials that generate fewer poten•ally damaging substances, recover such substances from emissions prior to discharge, or u•lize and recycle produc•on residues” (United Na•ons, 1997, p. 30). During the evalua•on of such technologies, the interac•on with socio-economic and cultural terms and condi•ons in which they are implemented should be taken into account (United Na•ons, 1997, p. 30). There are many studies that concentrate on classifying the environmentally sound technologies (Skea, 1995, pp. 389-393), their adop•on (Luken and Van Rompaey, 2008), policy design and implementa•on (Taylor, Rubin and Hounshell, 2005; Jaffe, Newell and Stavins, 2004), technology transfer (Perez Pugatch, 2011; Tébar Less and McMillan, 2005; Juma, 1994), assessment (Interna•onal Environmental Technology Centre, 2003), and intellectual property rights frameworks (Ebinger and Avasarala, 2009). Although all these topics are associated with the ac•ons undertaken by the suppliers of environmental technologies, who design and launch environmentally friendly solu•ons, the process of the development of such products and services has not yet been widely examined.
Currently, there are two main tendencies that determine the ac•vi•es of enterprises. On the one hand, it is striving to create new knowledge, innova•ons, new solu•ons because such ac•ons are seen as opportuni•es for growth. On the other hand, there is a tendency to create a certain balance between the different types of ac•vi•es for the sustainable development of the company (Azzone and Noci, 1996; Bansal and Roth, 2000). These two trends have influenced the companies’ need to focus on both ecology and innova•on in their business ac•vity (Cleff and Rennings, 1999).
There are many factors that influence companies’ behavior and willingness to introduce innova•ve products and technologies to the market. Among them, it is possible to dis•nguish two categories: internal factors, which origin from the company and external ones, coming from the organiza•onal environment (Janasz and Kozioł, 2007, p. 20). The first group consists of a firm’s R&D ac•vity and knowledge, skills and resources gathered inside the company (Janasz and Leśkiewicz, 1995; Białoń, 2010). The later one is composed of the influen•al forces of compe•tors, informa•on derived from the market demand (Sosnowska, 2000) and knowledge sourced for research ins•tu•ons (Penc, 1999, pp. 160-163).
Innova•ons created in response to iden•fied market needs are named demand-pull innova•ons (Janasz and Kozioł, 2007). Their existence has
been highlighted in the Rothwell’s five genera•ons of innova•on framework (Rothwell, 1992). Another demand side approach to the new products crea•on is the concept of user-driven innova•on. According to this concept the users are involved in developing new products, services and ideas (Von Hippel, 2005). It requires understanding the needs of users and their engagement in the process of enterprise development (TemaNord, 2006).
Customers play an important role in a company’s development. A well established rela•onship with the customers and examining their mo•va•on to buy and use firm’s products and services is important for defining company’s opportuni•es for growth (Johnson, Christensen and Kagermann, 2010, pp. 51-61). Clients play a key role in improving and developing new product or service ideas (Carrillo-Hermosilla, Del Río and Könnölä, 2009, pp. 17-19). In literature a special group of clients named “lead users” has been iden•fied (Urban and Von Hippel, 1988 p. 569). They can be defined using two following characteris•cs:
these clients have needs that will be common in a marketplace long •
•me before other customers;
they will highly benefit by obtaining a solu•on (product or service), •
which is in line with the needs they present.
According to Von Hippel (1988, 2005), in order to iden•fy the right group of customers who can be involved in the idea genera•on and development of the products, the lead user methodology should be applied (iden•fica•on of trends on which users have leading posi•on, iden•fica•on of lead users, development of lead user product idea, market tes•ng in order to see if the idea fulfills the needs of typical users). Moreover, the research shows that customers o%en use the products in ways that they were previously not designed for. Knowing such things can help the company to find new ways to extend its product por•olio (Anthony, Eyring and Gibson, 2010, pp. 125-126). Although many large companies gather informa•on and data about the people and enterprises that buy their goods, these efforts do not guarantee gaining a sufficient amount of knowledge (Zook, 2010, pp. 161-164). Zook (2010) conducted the research within the companies that care about monitoring their clients’ ac•vity and found out that only 25% of them declare that they fully understand their customers. According to the findings of “Management Tools & Trends” survey, in 2013 Customer Rela•onship Management (CRM) is seen as an important investment priority (Rigby and Bilodeau, 2013). CRM was first introduced in the survey in 2000 and was ranked 15th in terms of
usage and 22nd in terms of sa•sfac•on out of 25 other tools. In 2013 it was
ranked by the companies first in both usage and sa•sfac•on. At the same •me, CRM has moved from company-centric approach to the world of co-crea•ng value with customers, where enterprises need to hold dialogues with their
clients, rather than simply target them (Prahalad and Ramaswamy, 2004, pp. 132-134). A successful company is able to create customer value proposi•on (CVP) (Johnson, Christensen and Kagermann, 2010, pp. 51-61). According to Bower and Christensen (2010), customers have extraordinary power in influencing enterprises paths of investment. It is important for the company to care about their preferences, especially while thinking about launching new product or developing innova•ve technology. In many firms, processes used to forecast technological trends, learn about customers’ needs, allocate resources, asses profitability and commercialize new products are focused on current customers and markets in order to exclude the goods that do not meet clients’ needs (Bower and Christensen, 2010, pp. 20-34). On the other hand, these companies focus on constant development of innova•ve technologies, both incremental and radical, in the direc•on of the future genera•ons of customer’s poten•al needs, but make the decision of commercializa•on only if their products meet the needs and requirements of mainstream customers (Bower and Christensen, 2010, pp. 20-34).
A review of empirical studies shows that there are customers who ac•vely par•cipate in the process of crea•ng innova•ve solu•ons and become inventors or co-developers (Hienerth, Von Hippel and Baldwin, 2006, pp. 1291-1313). The evidence of such phenomenon are, among others, the cases of mountain bikes (Luthje, Hersta•, and Von Hippel, 2005, pp. 951-965), chemical produc•on process (Freeman, 1968), CAD so%ware (Urban and Von Hippel, 1988, pp. 569-582), innova•ons in oil refining (Enos, 2013), and scien•fic instruments (Riggs and Von Hippel, 1994, pp. 459-469). In addi•on, research reveals that users also play an important role in the development of consumer goods innova•ons (Franke and Shah, 2003, pp. 157-178). Users with similar needs form some•mes user-innova•on communi•es, where they can cooperate and assist each other with their innova•ons development (e.g. open source communi•es in which informa•on, assistance and innova•ve problem solu•ons are freely shared) (Foray, 2006, pp. 62-64). The output of such process can be called experience innova•on (Prahalad and Ramaswamy, 2004, pp. 51-54).
The same mechanisms concerning enterprise-customer behavior prac•ces apply to the companies that develop innova•ons, especially in the field of environmentally sound technologies (Carrillo-Hermosilla, Del Río and Könnölä, 2009, pp. 17-19). User-driven innova•on can widely influence the extent and direc•on of products developed within the company or industry (Von Hippel, 2005).
Within the years, customers’ rela•onship with the companies has changed, and along with it the tools that firms use to analyze and assess their behavior (see: Table 1). The recent research of Prahalad and Krishnan
(2010) has shown that in developing innova•ons companies should seek to co-create value with different types of customers, not only lead users. The authors state that such approach is helpful in the process of iden•fying and foreseeing evolu•on paths of all sorts of current and future customers (Prahalad and Krishnan, 2010, pp. 72-86).
Table 1. The evolu•on and transforma•on of the company-consumer
interac-•ons
Consumers as Passive Audience Consumers as Co-Creators
Time Frame 1970s, early 1980s
Late 1980s
and early 1990s 1990s Beyond 2000
Role of the consumer and concept of the market
Consumers are “outside the firm”; they are seen as passive buyers with a predetermined role of consump•on. Consumers are a target for exchanging the firm’s offerings.
Consumers are part of the enhanced network of competencies; they co-create (and co-extract) value. They are collaborators, co-developers, and compe•tors. Managerial view of consumers The consumer is an average sta•s•c; groups of buyers are predetermined by company. The consumer is an individual sta•s•c in a transac•on, anywhere from a database record to an individually addressable en•ty. The consumer is a person; cul•vate trust and rela•onships.
The consumer is not only a person whose individual iden•ty must be respected, but also embedded in thema•c communi•es and part of an emergent social and cultural fabric. Company’s interac•on with consumers and development of products and services Tradi•onal market research and inquiries. Preconfigured products and services are created without much feedback.
Shi% from selling to helping consumers via help desks, call centers, and customer service. Iden•fy problems, then redesign products and services based on feedback.
Iden•fy solu•ons from lead users. Customize products and services from preconfigured menu of features. Consumers are co-creators of value. Dialogue, access, risk assessment, and transparency are building blocks of co-crea•on of value. Companies and lead consumer co-shape expecta•ons and market acceptance of experience environments. Purpose and flow of communica•on Gaining access to and targe•ng predetermined groups; one-way communica•on. Database marke•ng; firm-to-individual access; two-way communica•on. Rela•onship marke•ng; two-way access and communica•on.
Ac•ve dialogue with consumers to co-shape individual expecta•ons and co-construct personalized experiences. Mul•way access, network communica•on.
Another factor that can mo•vate company’s managers to develop novel•es, especially eco-innova•ons, is the good environmental performance of their compe•tors. Such ac•on can be also undertaken in order to improve firm’s reputa•on in the eyes of customers (Luken and Van Rompaey, 2008, p. 69). The behavior of company’s compe•tors can be also impeding. The interest in the developing technology of powerful but less innova•ve market players can delay or hinder the innova•on process (Visser, Jongen and Zwetsloot, 2008, pp. 85-94). In general, the existence of compe•tors can s•mulate innova•on. Enterprises may race to be first to the market with the innova•ve product of technology. Moreover, companies may come up with lower cost manufacturing and in this way, by increasing their profit, may reveal their ability to compete. In addi•on, compe••on can s•mulate firms to iden•fy and fulfill customers’ yet undiscovered and unmet needs and develop new solu•ons to sa•sfy them (Federal Trade Commission, 2003). The presence of relevant compe•tors can also be a source of strategic advantages. These can be classified into four general categories: strengthening the compe••ve advantage, improving current structure of the industry, suppor•ng market development and preven•ng new poten•al entries (Porter, 2006, pp. 254-265).
Ansoff and Stewart (1967) claim that a systema•c analysis of the market is needed in order to adequately manage the corporate technology. On the basis of the characteris•cs of parameters of technologically intensive businesses they have proposed a model of strategies that examines the •ming of a firm’s entry into an emerging industry (see: Figure 1). Within the model, the company may choose one of the possible approaches to the market and technological knowledge: first to the market, follow the leader, applica•on engineering and me-too (Ansoff and Stewart, 1967, pp. 81-83).
Figure 1. Possible approaches to the market and technological knowledge Source: Own elabora•on based on: Ansoff and Stewart (1967, pp. 81-83).
It is worth no•ng, that the commonly called “imitators” in the model of Ansoff and Stewart are represented by three types of strategies and should not be confused with the kind of companies that simply copy technologies without any own contribu•on. The concept of “crea•ve imita•ons”, which are developed by the companies who offer new applica•ons of previously present technologies that address different user segments was also put forward by Peter Drucker (1992, pp. 235-240). This phenomenon is created by markets, rather than solu•ons or technologies, and by customers rather than technology suppliers. It can be defined as oriented and market-inspired approach. Crea•ve imitators serve the market niche that is not fulfilled by pioneers, so they do not create the demand for products, they sa•sfy the exis•ng one (Drucker, 1992, pp. 235-240).
The economic literature has long pointed to the existence of imita•on, especially in terms of innova•ve ac•vity of the pioneers (Schumpeter, 1939). In order to dis•nguish the types of market players Schumpeter describes the leader as the one who effec•vely directs the means of produc•on into new areas of applica•on (Schumpeter, 1960, pp. 117-150). Like other researchers, Michael Porter also dis•nguishes market leaders from followers. He claims,
however, that appropriate ac•ons that need to be undertaken to deal with compe•tors apply to both of these groups (Porter, 2006, p. 253).
The role of compe••on has been also discussed by Von Hippel (1987, 2005, 2007). He dis•nguishes the compe••on between two groups of market players: customers and rivals. He claims that there is a phenomenon named informal know-how trading, which is a rou•ne and informal exchange of informa•on between engineers and employees working in different enterprises. According to his findings, this type of behavior can be some•mes observed among even direct rivals (Von Hippel, 1988, pp. 76-90).
To sum up the literature review, it should be pointed out that the results of previous research suggest that both consumers and compe•tors can play an important role in the developing innova•ons, but their importance depends on company’s strategy. Therefore, it is worth examining to what extent customers and compe•tors influence the development of product innova•ons by the companies-suppliers of environmentally sound technologies in Poland. The detailed analysis of the importance of this source of innova•on for suppliers of environmentally sound technologies in Poland will be conducted in next sec•ons of this ar•cle.
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The research focuses on analyzing the development of environmentally sound technologies in Poland with regard to the role of compe•tors and customers. The data was gathered by conduc•ng in-depth, semi-structured interviews with the representa•ves of selected 40 companies opera•ng in the field of environmentally sound technologies. The chosen enterprises represent six broad areas of environmental technology:
renewable energy sources: manufacturers of solar collectors, •
brique*ng machines, fuel cells, hydro power and biogas solu•ons (10 firms);
waste management: suppliers of solu•ons for treatment of hazardous •
waste and by-products of coal combus•on, secure storage of liquid fuels, biomass gasifica•on, processing plas•cs into liquid fuels (9 firms);
water and wastewater management: suppliers of water treatment •
plants, water treatment solu•ons and drying of sewage sludge solu•ons (7 firms);
air protec•on: suppliers of pollu•on emission reduc•on systems •
(2 firms);
energy efficiency: suppliers of technologies that support saving •
electricity and heat, solu•ons for passive houses, energy-efficient ligh•ng solu•ons, heat pumps, media management systems for energy (9 firms);
biodiversity protec•on: suppliers of technologies for reclama•on of •
lakes and barriers to protect fish (3 firms).
The companies dis•nguish themselves from other environmentally sound technologies industry market players in Poland as suppliers of own, eco-innova•ve products and their interest in interna•onal markets. The companies from the sample were examined by independent experts in terms of the originality and ecological significance of the innova•ve products and technologies they introduce to the market, as well as their environmental impact and poten•al for development. Interview with each company representa•ve was based on the same script, which contained a list of detailed ques•ons. The interviewers were allowed to interact freely with the interviewees in order to gather informa•on on both facts and their interpreta•on, along with personal opinions of respondents. That is why during the interviews it was possible to discuss addi•onal, relevant topics. The respondents were guaranteed anonymity. All of the respondents were either owners or managing board members, including sales managers and product managers. They were selected by their companies as well-informed, reliable sources of informa•on.
The interviews were conducted in 2012. They were recorded, transcribed, divided into topic-based text segments and coded into 77 codes collected in the codebook. The codebook was the basis for analysis and interpreta•on of the qualita•ve data (Corbin, Strauss, 1990; Glaser, Strauss, 2006). Coded text segments allowed to convert some of the data into percentages and numbers in order to create the background for qualita•ve interpreta•on of the research results.
It is worth saying that the sample of companies selected for the purpose of this research consists of specific par•cipants of the industry. They are ac•vely engaged in research and development ac•vi•es, are the suppliers of product innova•ons, provide their own solu•ons and ac•vely operate on foreign markets. The research results drawn from such popula•on cannot be applied to the whole popula•on of the companies opera•ng in the field of environmentally sound technologies. This, along with other methodological shortcomings of qualita•ve studies, can be seen as a research limita•on. Moreover, the sample is narrowed down exclusively to the Polish companies and it might be beneficial for future studies to focus on cross-country analysis.
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The origins of technology
Development of the best technology does not guarantee business success unless it is not commercialized. The first step to introduce the solu•on to the market is to sell the idea to an external party or set up a company in order to develop it. Nearly 80% of interview respondents declared that the technology was developed in the exis•ng company, of which 57.5% claimed that the company existed long before the technology was developed.
“First the company [was developed], and then the product was made. However, the product existed previously in my head. And the knowledge that was used to develop it existed before. I have to admit, that the ability to design turbines was related to the knowledge gained at the university (college and doctoral studies), in many research studies, other exper•se researches and work in the laboratory (I researched more than 70 turbines in the laboratory in the University of Technology). This knowledge had been developed throughout the years, along with the product idea in my head.”
[Company 38]
Every fi%h company was founded to refine and implement the technology on the market, but its basic technology had been developed previously. Such scheme appeared frequently in companies that have developed innova•ve solu•ons using the employees, resources and engineering facili•es of the parent company, and a%erwards they established a new company dedicated to the development and implementa•on of this new technology. Moreover, such approach was also widely adopted by the innovators who had another job at the •me of development of this technology. A small percentage of respondents at the design stage of the new solu•on had no inten•on to sell it. Most of the interviewees declared, however, that companies were established in order to fine-tune and start to sell the technology.
“First there was the idea that there is a need for such technology. It started like this... one day I said to my partner, listen, I have a very good idea to use this technology... we should start a company to be able to sell it.”
[Company 24]
No ma•er what the origin of the enterprise is, the most important thing that speeds up the commercializa•on of this new technology is the existence of the company in which it is possible to conduct research, work on the new
technology and test it. On the other hand, according to few respondents, it is a necessity to run the company while working on the new product, because the research is very expensive and public funds for this purpose are difficult to obtain by individuals, who have an idea to develop new technology.
Over 30% of the pre-exis•ng businesses significantly changed the range of offered products or even moved to another industry during the •me of their business development. In addi•on, 15% of respondents declared that over the years company’s interests expanded significantly. This can be seen as the proof of the fact that enterprises from the interviewed sample concentrate on searching for new business opportuni•es and care about the development of their technologies and products por•olios.
„At the beginning our firm was a service company focused on installing machinery and equipment. A"er gaining some experience in this field, we extended the range of our ac•vi•es star•ng the commercializa•on of new products. This was followed by the development of trade and finally manufacturing. Now, our firm commercializes new products, manufactures them and sells them to consumers.”
[Company 23]
The background of technology crea•on
It is very difficult to define one driving force, which was the basis for the development of all new technologies and companies from the sample. However, it is possible to iden•fy three most important factors that, according to interviewees, had a direct impact on the start of the ac•vi•es aimed at crea•on of new solu•ons that led to start a new business. According to 55% of respondents the main source of their ac•vity was the idea created thanks to different sources of inspira•on (see: Figure 2). Most of the ideas were somehow influenced by external forces, such as work opportunity with compe•tors, partners or customers and country’s economic condi•on. Amongst all, in 30% of cases the idea crea•on processes was inspired by other market players.
“This was a nega•ve inspira•on, it means that we were looking what is out on the market and we saw that it was bad, so that we were inspired to make something different.”
[Company 29]
Furthermore, the interviews’ results show that 12.5% of companies were established thanks to direct coopera•on with partners: in joint ventures, with
the help of a parent company or in coopera•on with the higher educa•on ins•tu•on. About 10% of respondents say that the development of the technology was directly affected by a client, who declared willingness to purchase a solu•on that was not yet mature. This customer’s need created the opportunity for faster development and tes•ng of the technology.
“The consumer decided to buy our prototype of the product to use it and at the same •me experiment with it. That’s how everything began.”
[Company 10]
About 15% of respondents emphasized that the economic factors played an important role in technology development. These factors included the emergence of a market gap, the desire to make money or the transforma•on of the Polish economy in 1990s from plan to the free market system, which has opened the way for Polish businesses to expand to other countries. Just a few companies arose from the desire of their owners to implement into prac•ce the knowledge gained during their studies.
Figure 2. The background of technology crea•on
The role of other market players
The results of interviews conducted among the Polish enterprises revealed that entrepreneurs, while developing new technology, frequently examined and monitored the market in order to determine whether and in what areas there is a need to introduce new solu•ons or improvements to the
technologies that exist so far. The engineers examined exis•ng technologies in order to iden•fy their func•onal and technical deficiencies and imperfec•ons. According to some interviewees it is the simplest way to find week points and flaws of exis•ng technologies. They believe that the weakness of other players in the market is a sufficient inspira•on to create new solu•ons. Another way to study compe••ve products is to analyze exis•ng patents. According to the respondents, this approach is o%en used to gather informa•on on the progress of technology development and plan paths for further development of own technical solu•ons.
“You cannot develop a technology from start to finish by yourself, without taking into account things that have been developed by others before. (...) If somebody made the first car, then it was preceded by a rack wagon, and so on... So we always draw inspira•on from similar items. However, we do not copy them, because it makes no sense. We try to iden•fy weaknesses of available solu•ons and improve them while developing our own [technologies].”
[Company 24]
60% of respondents admit that in crea•ng new technologies they drew inspira•on from similar solu•ons of other companies. In such cases, innova•on arises from a combina•on of knowledge and experience of innovators and designers with the effects of the work of other market players. A significant part of respondents stated that they were inspired by unique solu•ons developed by companies with whom they compete, especially in terms of product func•onality. 57.5% of the companies admit that they constantly track the ac•vi•es of direct compe•tors and see it as an important factor in technology development. A large propor•on of these respondents consider such behavior as a common phenomenon. A small group of interviewees claimed that the best products are made on the basis of key technologies introduced to the Polish market by foreign companies.
There are many sources of knowledge for the development of new solu•ons in the field of environmentally sound technologies in Poland. The majority of respondents stated that a reliable way of gathering informa•on about the ac•ons of other players in the market and their products are market observa•on and the analysis of available solu•ons. Becoming familiar with technological systems available on the market is considered an important element in the development of new products. Tracking the ac•vi•es of compe•tors may also lead to the effec•ve sharing of knowledge and experience between enterprises. Most of the respondents declared that the informa•on obtained at trade shows and industry conferences is o%en useful for crea•ng new technological solu•ons. According to some interviewees,
to develop effec•ve solu•ons, sufficient knowledge has to be also obtained from publicly available sources, such as books, the Internet, trade magazines and technical studies. The smallest percentage of respondents believe that in order to gather the informa•on necessary for new product development it is indispensable to cooperate with compe••on, also on the interna•onal level. It also happens that entrepreneurs use business intelligence agencies to obtain informa•on that is necessary to improve or create their own technology. But this is not a common prac•ce among the Polish companies that have been interviewed. Nevertheless, majority of the companies from the sample perceive other market players as compe•tors, not poten•al cooperators.
When asked about the purpose of developing own equivalent of the exis•ng solu•ons, the companies indicated most frequently a desire to improve its func•onality or introduce modern technology approaches. A few of the interviewees have been inspired by the ideas of other market players sought to fill the technological gap in the domes•c market.
Developing the technology is not the only way to introduce to the domes•c market solu•ons that are similar to those which successfully operate in other countries. The same effect can be achieved by using the technology of another company, by licensing or purchasing property rights related to the technology. Despite the fact that the companies have been aware of these possibili•es, only a few have decided to follow this strategy. Regardless of whether coopera•on with other market actors was present or not, according to some interviewees the main barrier that ul•mately affect the failure of such coopera•on regards financial issues.
Inspira•on is not always associated with direct copying of complete solu•ons. Only 5% of the companies from the sample admit that their developed technology was not original and innova•ve (see: Figure 3). There has been only one case in the researched sample of companies of copying and implemen•ng en•re solu•ons developed by related en••es opera•ng in the industry. In such a situa•on one part of the technology was implemented in the same way as in the compe•ng enterprise. In a few cases, the technologies that have been developed by the surveyed companies a%er their implementa•on turned out to be known before, but at the •me of the crea•on, inventors were not aware of this.
30% of the companies from the sample declare that they have not built their product ideas on the achievements of compe•tors, or other supply side market players. Among them, the majority admit that they were the innova•on pioneers who created the market which did not previously exist and there were no similar solu•ons. In other words, according to the respondents, there was no compe••on in the industry when the new idea emerged.
“In fact, we had nothing to refer to or gain inspira•on from. We did not know what would be the feature of this [new] material. Solu•ons were ours, original.”
[Company 22]
Figure 3. Responses to the ques•on: „Was the technology unique in the
mo-ment of its developmo-ment?”
Customers as inventors
As discussed in the literature review above, customers and users can be very important sources of improvements for exis•ng technologies. 65% of respondents admi•ed that clients o%en come up with an idea for a new product or technology. It happens that poten•al users ask for a machine that has not been previously offered, and then a company is trying to meet their demand. Such a situa•on takes place more o%en when products are usually customized.
The experience of companies from the sample shows that acquisi•on of informa•on from customers has been done in many different ways. Such informa•on is usually gathered during conversa•ons with clients concerning their needs and expecta•ons, as well as possibili•es to sa•sfy such needs by the new technology. Some respondents declared that their contact with customers was regulated in special agreements’ clauses, which obliged users to provide informa•on about technology performance. Surveys conducted among clients have been another important channel of informa•on flow. In such surveys customers have been able to specify what addi•onal features could be•er provide them excellent func•onality of technology. Some•mes, it happens that the customers report problems encountered during the use of
technology. In such a situa•on, according to a large group of the interviewees, the company, together with customer, seeks the best way to provide the best solu•on for the problem.
“We talk to the customers, [ask them] what they would like and what is their “dream” machine and what are the features that they would like the machine to have, to improve, to change. We also listen to these sugges•ons and on this basis we introduce more modern approaches in the new models of our products.”
[Company 10]
Typically coopera•on with customers turns out to be frui•ul, but it does not always give expected results. A•empts to reach a compromise with the user are some•mes long and tedious. For these main reasons, 25% of the companies from the sample do not seek feedback on the efficiency of their technology. What is more, some respondents reported that the adjustments of the offered solu•ons to customer needs are too expensive and do not sa•sfy them fully, so it becomes not profitable for the company to do such adjustments. Interviewees presen•ng this point of view argue that the best way to develop effec•ve and efficient technology is to rely on the knowledge and experience of designers and employees of the company.
Figure 4. Responses to the ques•on: “Have customers ever helped the
D!+5&++!;=
As emphasized in the literature, the role of customers and compe•tors can be seen as important in designing new products by other market players. The literature on innova•on and technology management provides a theore•cal framework dedicated to the analysis of the development of innova•ve solu•ons by companies-suppliers of environmentally sound technologies.
The ar•cle has inves•gated the process of developing environmental technologies in a group of Polish enterprises. Results of the study show that Polish companies-suppliers of environmentally sound technologies are willing to gain inspira•on from both demand and supply side market players. In case of supply side of the market, in most cases inspira•on was not aimed at copying the exis•ng successful ideas. The compe•tors are perceived as a source of inspira•on for further development of technological solu•ons, which confirms the findings discussed in the theore•cal part of this paper (Ansoff and Stewart, 1967; Von Hippel, 1987; Porter, 2006; Drucker, 1992). Classifying the final technologies established by the companies from the sample, it should be noted that only 5% of companies can be categorized in the framework of Ansoff and Stewart (1967) as “me-too”. More than 40% offered unique products, which can be seen as novel•es on the global market and can be placed in the category “first to the market”. Majority of the researched companies can be places right a%er the leader, in the category “follow the leader”, since the technologies developed by these companies were product-equivalent solu•ons previously introduced by the pioneers. Nevertheless, most technologies were not available previously on the local market.
It has been demonstrated that compe••on can also s•mulate firms to iden•fy and fulfill customers’ undiscovered and unmet needs and develop new solu•ons to sa•sfy them (Federal Trade Commission, 2003). Thus, a second crucial factor in the process of new ideas crea•on appears, which is the demand side element, i.e. clients. Many respondents agreed that the informa•on gained from the market was used to develop be•er solu•ons in terms of func•onality. Although companies concentrate on having a rela•onship with customers, these rela•ons have not been established by the Polish companies researched here in order to treat users as co-creators of product improvements or novel•es. This role of customers has been iden•fied in the literature (Prahalad and Ramaswamy, 2004, pp. 214-215), but when it comes to the interviewed Polish firms, it was not the case. The cause of such inconsistency of the findings with the conclusions drawn from the literature may be related to the fact that the market for environmentally sound technologies in Poland is rela•vely young, and there are not many customers who adopt new solu•ons. What is more, since the adop•on of such
technologies is not common, companies focus their innova•on development on the predic•ons of needs and wants of future customers and market observa•on. A major part of the respondents to this interview has declared that because of the fact that the solu•ons they have introduced were not known previously, crea•ng a market for them took some •me. These factors might have been an obstacle in having ac•ve dialogs with users. According to the classifica•on of company-customer interac•ons proposed by Prahalad and Ramaswamy, Polish companies-suppliers of environmental technologies should be classified in the category named “life•me bonds with buyers”.
C;=5>&+!;=
From the implica•ons of the research it can be concluded that the behavior of compe•tors and customers is an important factor that drives innova•veness of companies-suppliers of environmentally sound technologies. Different theore•cal approaches have been used to examine the role of compe•tors in the development of companies’ innova•ve products (Ansoff and Stewart, 1967; Von Hippel, 1987; Porter, 2006; Drucker, 1992). In order to iden•fy and evaluate the impact of customers on new solu•on crea•on, Prahalad’s and Ramaswamy’s classifica•on has been recalled.
The contribu•on of this research is two-fold. First, using in-depth interviews, it examined the innova•on behaviors of the Polish companies-suppliers of environmentally sound technologies and, second, it presented the evidence of the role of compe•tors and consumers in the innova•on processes. Evidence from Poland goes in line with theore•cal findings, showing that inspira•on while developing new solu•ons cannot be immediately associated with imita•on. This paper reveals specific features in innova•on behavior of the analyzed Polish companies when it comes to the role of customers as a source of innova•on. The case of Polish companies in environmentally sound technology sector does not confirm user-driven innova•on approach in new solu•ons’ crea•on. Although companies see the need to track their customers, they are not willing to focus on having close rela•onships with them and fully respond to their needs. The interviews show that users have not been used as co-creators of product improvements or development of novel•es, they play only an indirect role in innova•on processes.
It should be, however, pointed out that the evidence of this research cannot be applied to the whole popula•on of companies. In-depth interviews’ par•cipants were the suppliers of own, advanced environmentally sound technologies in Poland, while among other enterprises from the sector there
are also distributors of technologies or manufacturers of less advanced solu•ons.
The next step in the study of this complex phenomenon could be a mul•ple case study research on the basis of which it will be possible to discover the reasons for such behavior of companies.
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Abstrakt (in Polish)
Artykuł przedstawia dwie główne siły oddziałujące na tworzenie innowacji produktow-ych przez dostawców technologii nieszkodliwproduktow-ych dla środowiska, czyli konkurentów i klientów. Praca omawia te zjawiska na bazie rozmaitych podejść teoretycznych (Ansoff i Stewart, 1967; Von Hippel, 1987, 2005, 2007; Prahalad and Ramaswamy, 2004). Wyniki badań pokazują, że polskie firmy – dostawcy technologii nieszkodli-wych dla środowiska chętnie szukają inspiracji zarówno po stronie popytu jak i podaży rynkowych graczy. W przypadku strony podaży, w większości sytuacji inspiracja nie miała prowadzić do kopiowania już istniejących idei, które odniosły sukces. Konkurenci są postrzegani raczej jako źródło inspiracji do dalszego rozwoju rozwiązań technolog-icznych. Chociaż firmy koncentrują się na tworzeniu relacji z klientami i śledzeniu ich zachowań, relacje te nie zostały jeszcze w pełni stworzone przez polskie firmy objęte naszym badaniem, a klienci nie są wciąż traktowani jako współtwórcy udoskonaleń produktów czy nowych rozwiązań.
Słowa kluczowe: technologie środowiskowe, klienci, konkurencja, innowacje produk-towe, innowacje popytowe.
Biographical note
Magdalena Marczewska, doctoral candidate at the Faculty of Management,
University of Warsaw. She graduated from the University of Warsaw, Faculty of Management and Warsaw School of Economics. Her research interests focus on innova•on management and environmental management. She studied and carried out research at the University of Kentucky, the University of Padua and the London School of Economics and Poli•cal Science. Author and co-author of two management science books. Research grant holder in the “ETIUDA” program, funded by the Na•onal Science Center (NCN), the research agency of the Polish government.
